The Dow Jones today is preparing for another positive day after three of the "Fab Five" tech stocks beat earnings expectations yesterday.
Dow Jones futures are up 18 points after Amazon.com Inc. (Nasdaq: AMZN), Microsoft Corp. (Nasdaq: MSFT), and Alphabet Inc. (Nasdaq: GOOGL) all beat Wall Street expectations yesterday. But that isn't the only story in tech stocks. Here's the "next big thing" that Google didn't mention...
Here are the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
Yesterday, earnings season hit full swing with reports from Amazon, Alphabet, and Microsoft. AMZN stock is up 8.2% this morning after the firm crushed revenue expectations. GOOGL stock is up 4.2% after the firm reported huge gains in its advertising sales. Finally, MSFT is up 6.8% after it hit a record high.
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It will be another busy day of chatter over earnings reports and central bank policy. This morning, European markets hit a five-month high thanks to strong earnings and news that the European Central Bank plans to remain dovish in its approach to reducing its stimulus plans. On the European front, Swiss-based UBS AG (NYSE: UBS) and the Royal Bank of Scotland Group Plc. (NYSE: RBS) both topped analysts' earnings expectations.
Shares of insurance giant Aetna Inc. (NYSE: AET) are up more than 12% on news that it could be acquired by pharmacy giant CVS Health Corp. (NYSE: CVS). The reported deal would be worth at least $200 per share for Aetna investors. Aetna had previously attempted to merge with Humana Inc. (NYSE: HUM) in February, but the deal was struck down on antitrust grounds.
While markets are loving deal rumors and loose monetary policy talk, the real rumors are in Washington. Markets are questioning if Republicans will be able to squeeze through the largest overhaul of corporate tax reform since the 1980s. Yesterday, the House of Representatives narrowly passed a budget that will now allow the Senate to vote on tax cuts without the threat of a filibuster. However, corralling votes could be very difficult at a time when the Republican party continues to remain divided on key portions of tax policy, including reductions in retirement savings and state and local tax deductions.
Crude oil prices fell in pre-market hours, but it wasn't all bad news. Brent crude prices were retreating after almost topping $60.00 per barrel. Prices have been moving upward after Saudi Crown Prince Mohammad bin Salman announced support for an extension to OPEC's supply reduction plans. The cartel's actions have helped reduce a global supply glut. However, the WTI crude oil price today is falling because of rising U.S. output. As prices push higher, more drillers are turning on their rigs.
Stocks to Watch Today: XOM, JCP, CVX
Shares of Exxon Mobile Corp. (NYSE: XOM) were up 0.6% in pre-market hours after the company reported a huge jump in quarterly profits. The firm reported that profits surged 50% year over year thanks to stronger prices for oil and natural gas. The company reported earnings per share (EPS) of $0.97, topping Wall Street estimates by eight cents. The firm also beat revenue expectations with a final number of $66.16 billion.
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Shares of JC Penney Co. Inc. (NYSE: JCP) fell more than 20% in pre-market hours after the company downgraded its full-year performance outlook. The company says that it is revamping its women's department and seeing increased sales. However, the company has been declining for more than a decade thanks to increased competition from Amazon and other e-commerce sites. This is just more evidence of the Retail Ice Age that continues to plague the brick-and-mortar retail sector, but it's creating a profitable investment strategy...
Shares of Chevron Corp. (NYSE: CVX) slipped 1.2% in pre-market hours after the energy giant fell slightly short of revenue expectations. The firm topped EPS expectations by eight cents, reporting an EPS of $1.11. However, its $10.32 billion in quarterly revenue was about $180 million less than analysts' expectations.
Additional companies reporting earnings on Friday include Royal CaribbeanCruises Ltd. (NYSE: RCL), Merck & Co. (NYSE: MRK), AbbVie Inc. (Nasdaq: ABBV), Colgate-Palmolive Co. (NYSE: CL), Goodyear Tire & Rubber Co. (NYSE: GT), Sohu.com Inc. (Nasdaq: SOHU), Phillips 66 (NYSE: PSX), Cabot Oil & Gas Corp. (NYSE: COG), and Rockwell Collins Inc. (NYSE: COL).
Friday's U.S. Economic Calendar (all times EDT)
GDP at 8:30 a.m.
Consumer Sentiment at 10 a.m.
Baker-Hughes Rig Count at 1 p.m.
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Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.